Nintendo Switch Loses Shine With Shipments Seen Missing Target

Doubts are growing whether Nintendo’s Switch can ever become a mass-market product, according to Bloomberg.

When the device debuted last year as a hybrid console that could be carried around, it was classic Nintendo, a new gadget that broke the norms of conventional video games. Equipped with a built-in screen and hypersensitive controllers, the Switch was billed as a worthy successor to the Wii, Nintendo’s rule-breaking blockbuster console.

After cramming its best franchises into the first 12 months, Nintendo was left with fewer games to show off in the second year, hurting hardware sales. Cardboard accessories introduced in April, called Nintendo Labo, have mostly failed to expand interest beyond those who were already planning to pick up a Switch.

The holiday quarter historically accounts for about half of the game maker’s sales, and analysts have been reducing their full-year estimates for operating profit and revenue since March. Nintendo shares have dropped about 33 percent since a January peak, wiping out more than $20 billion in market value. Nintendo declined to comment on the forecast or plans for the Switch, and representatives pointed to recent comments by executives saying that it’s too early to evaluate performance for the second year, and that the company is sticking by its forecast.

This year’s biggest disappointment has been Nintendo Labo, the cardboard add-ons that transform the Switch into playable objects. Like the Wii, they were designed to appeal to non gamers to broaden the device’s customers beyond core fans. But sales have struggled. Last month, Nintendo President Shuntaro Furukawa told reporters in Osaka that “it will take time“ to see if the product delivers.

While a lower price sticker would help boost Switch sales, it may further depress sales of the 3DS. Ever since the Switch was announced, analysts have expressed concern that it will cannibalize sales of Nintendo’s other portable gaming device. Another possibility is the introduction of different hardware versions, such as one designed for children. Credit Suisse sees “a strong likelihood“ that new Switch models will go on sale as soon as next year.

Apart from potential price cuts and new models, the other key to regaining momentum will be new games. Nintendo is planning big releases next year, including a new Animal Crossing game, a Pokemon title and the latest installment of its Metroid series. Whether that can broaden the install base beyond core gamers remains to be seen.